from the not-so-clever dept

By their very nature, drug patents can create monopolies that allow prices to be kept artificially high. In other domains that may be simply an annoyance or inconvenience, but in the world of medicines, it can be a matter of life or death for those unable to afford those inflated prices.

To get around this, various alternatives have been suggested, such as prizes – an example of how that might work for the development of drugs to treat HIV/AIDS was discussed recently in Techdirt. An alternative approach is the use of patent pools. Here's how the Medicines Patent Pool explains the system:

With the patent pool model, multiple patents are ‘pooled’ and licensed out by one entity, in order to cut down on transaction costs for all parties involved. In the case of medicines, this allows more affordable and more adapted versions of patented drugs to be produced as generics, long before their 20-year patent terms run out. Not only will the Pool help speed up the process of getting urgently-needed newer and improved HIV medicines to people who need them at much more affordable prices, it will also foster the development of needed products that do not yet exist, such as certain ‘ fixed-dose combination’ (FDC) pills containing two or more newer medicines in one pill, adapted medicines like those that can be used in hot climates without refrigeration, and HIV medicines for children.

The Pool is a win-win-win model, whereby patent holders are compensated for sharing their patents, generic manufacturers gain access to markets, and patients benefit more swiftly from appropriate and adapted medicines at more affordable prices.

on December 19, Johnson & Johnson continued to turn its back on people living with HIV/AIDS in many developing countries by telling the Pool it refused to license its patents on the HIV drugs rilpivirine, darunavir, and etravirine.

Johnson & Johnson says there is no urgency for making these drugs widely available in developing countries. That’s simply not true. MSF now provides treatment to more than 180,000 people living with HIV worldwide, and is beginning to witness the inevitable, natural phenomenon of treatment failure, whereby people develop resistance to the drugs they are taking and need to graduate to newer medicines.

As MSF further points out:

Unless Johnson & Johnson and other companies take part in a collective way forward to bring affordable medicines to more people in all developing countries, they are not part of the solution as they want the public to think. They are contributing to the problem. They want to control who can make and use their drugs based on their commercial needs rather than the needs of people living with HIV.

What makes that particularly frustrating for doctors seeking to widen the availability of these drugs is that Johnson & Johnson has an entire section of its main web site entitled "Our Credo Values", which are summarized as follows:

The values that guide our decision making are spelled out in Our Credo. Put simply, Our Credo challenges us to put the needs and well-being of the people we serve first.

Moreover, that Credo even has the following commitment:

We must constantly strive to reduce our costs in order to maintain reasonable prices.

Johnson & Johnson's refusal to participate in the patent pool is not only ill-advised in terms of the negative publicity this is likely to generate, but ultimately counterproductive. As MSF notes:

Going forward, mechanisms to promote generic competition by overriding patents—as allowed by international law—in addition to voluntary initiatives, such as the Medicines Patent Pool, will be crucial to ensuring that monopolies do not stand in the way of patients' access to lifesaving drugs.

That is, when companies are persistently obstructive, countries will simply override patents altogether, as treaties permit when public health is at stake. Is that really what Johnson & Johnson wants?

Response to: Anonymous Coward on Dec 30th, 2011 @ 7:40am

Constitutionality of patent pool

"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." (US Constitution, Article 1, Section 8, Clause 8; emphasis added)
Quote from the article:

Not only will the Pool help speed up the process of getting urgently-needed newer and improved HIV medicines to people who need them at much more affordable prices, it will also foster the development of needed products that do not yet exist, such as certain ‘ fixed-dose combination’ (FDC) pills containing two or more newer medicines in one pill, adapted medicines like those that can be used in hot climates without refrigeration, and HIV medicines for children.

The use of patents to block innovation like this is exactly the OPPOSITE of what the Founding Fathers had in mind.

"no urgency"?

"Johnson & Johnson says there is no urgency for making these drugs widely available in developing countries"

I seemed unlikely to me that a corporation would make such a blatantly crass statement, so I went looking for an original quote. (The quote above is second hand, via DWB.)

I couldn't find a quote that matched the "no urgency" message, but but here's a quote from Will Stephens, "vp of global access and partnerships at J&J’s Janssen Global Services"...

"Because WHO treatment guidelines drive the public health treatment focus and national guidelines in resource-limited countries, the current clinical demand for our medicines is extremely limited there. In addition, HIV resistance testing is not widely available in resource-limited settings, which makes the contruction (sic) of active treatment regimens challenging. As a result treatment of 3rd-line patients is largely restricted to centers of excellence where physicians have specialist knowledge and/or access to resistance testing."

Mayb e someone with some expertise in the area can provide better insight, but what he appears to be saying is that developing countries don't have the capabilities required to test for the kinds of conditions that would be addressed by the drugs in question. So, maybe he's using the term "demand" to mean the demand of the clinicians in the developing countries -- which would kinda, almost make a tiny bit of sense -- and not to mean the demand of the actual kids dying of AIDS -- which would not only be blatantly crass and insensitive, but just plain dumb from a business standpoint.

Johnson & Johnson used to be a good moral company, but in more recent years they've been acting questionable. From labeling tainted medicines isolated incidents (and brushing these incidents off and not seeming to take these issues as seriously as they should be) to potentially dangerous soft recalls, it seems like the company might be heading down the wrong path.

Re:

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I read the patent pool explanation and I don't see how it gets the patent holder anywhere near the money they would have controling the monopoly.

I don't either. The quote from the Medicines Patent Pools makes blanket statements about the benefits of the patent pool model, but nothing in the quote provides any rationale. The patent pool model is described as a "win-win-win" but this just flies in the face of common sense. Now, I admit that I know next to nothing about patent pools, so there could be a perfectly logical reason that they would actually benefit big pharma as well as the patients, but there's nothing in this post that explains how.

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The fundamental issue is that the company sees the value of such patents as monetary whereas the victims and their physicians see the value of such patents as their ability to fill that medical necessity.

Overriding patents is like jury nullification. It sounds like a great idea, it seems to be a power that exists, but it is something that needs to be used carefully to avoid a backlash.

Quite simply, actions like that undermine the idea of a patent system altogether, in the same manner that jury nullification undermines the legal system. The results short term can be a "win", but the long term repercussions could be very negative indeed.

Re: Re: Re: Where do morals come from?

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The fundamental issue is that the company sees the value of such patents as monetary whereas the victims and their physicians see the value of such patents as their ability to fill that medical necessity.

How the company actually sees things is irrelevent to the OP's point. The point is that the Medicines Patent Pool is stating that its model would be a "win" for J&J, which by any rational interpretation, would mean that it would be more profitable than doing business in the traditional way. But there is nothing in the quote from the Medicines Patent Pool to support this assertion. It could very well be documented somewhere else, but you'd think that this information would be important enough to include in the actual post instead of leaving it to trust in an organization that most TD readers have probably never heard of.

Quality vs Monopoly

Maybe they should try competing on quality, rather than monopoly? If we eliminate patents, they would have only quality, service, and price for differentiation. Prices will get close over time as a natural function of the market. Quality of product and quality of service (timeliness and issue resolution) would be all that is left. Could they make the cut then?

Re: Quality vs Monopoly

Quality of service on a pill? Are you mental? maybe it comes in a cool box with neon flashing lights?

Those drugs can cost a billion+ to reasearch, develop, test, but they cost less than a dollar to mass produce. How do you convince people that they should spend $1.50 on your pill when it is functionally no different from you competetion which is selling his for $0.50? Rely on their morality to do the right thing? How long you think that will play out? a year maybe?

There needs to be a reward for this level of investment otherwise nobody will do it. They will take their money and go write market speculation software that plays war games against other market speculation software.

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The idea is that J&J licenses their patent to the pool who then licenses it out to many other people from one easy central place. J&J doesn't have to spend the money to produce the product, they can just sit back and get payed.

The idea is that J&J gets payed little bits from many directions instead of large chunks from only one.

Curious why whatever it was that J&J communicated to this group is not presented. It would help put the article in context, but perhaps the context does not fit neatly within what the group wants others to believe.

Reliance on hearsay does nothing to promote an understanding of all sides of an issue.

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jury nullification should be brandished and often used, especially for pile on charges. The first thing the court should have to explain to the jury is the definition and the worth of the law, if that smells ok then we can move on to whether or not the defendant is in violation.

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"but the long term repercussions could be very negative indeed."

There is little to no evidence that patents produce any long term social benefits. When you can't allude to any (short or long term) proven benefits of something, allude to the unproven alleged long term benefits and leave the burden to everyone else to prove a negative.

The problem is that patents are a special, unowed, monopoly privilege and monopolies are known to cause economic and social harm so if you want them then the burden isn't on us to disprove their alleged long term benefits, it's on you to prove them.

Re: Re:

The short term benefits of wearing a magnetic bracelet may not exist, but the long term benefits are longevity, strength, improved quality of life, etc...

The short term benefits of product x may not exist, but the long term benefits are ....

That's how all sorts of marketers sell their junk, when you can't allude to any proven short term benefits, allude to speculative long term benefits. This can be applied to just about anything and can be used to justify all sorts of unjust policies and quack medications.

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The short term benefits of giving me a million dollars maybe bad, but the long term benefits could be good. It teaches you a good lesson in generosity and there is a thing called karma where what goes around comes around and when it comes around you can get your money back three times fold. Plus, there maybe all sorts of unknown benefits in the afterlife too. So don't delay, give me a million dollars today.

Re: Re: Re: Quality vs Monopoly

"The idea is that J&J gets payed little bits from many directions instead of large chunks from only one."

Yes I got that part. They can make 40% profit if they do it themselves, or they can make 5-10% of sales if the license. It is not inherent that the later is anywhere near the same ballpark as former. And it certainly isn't the case with the 3rd world.

Keep in mind that right now there are vaccines off patent that aren't making it to the 3rd world. So given that there are vaccines and treatments that have no royalty costs that aren't being produced for people of little means I fail to see how this will help get J&J additional money when their royalties enhance those costs.

"- TFA says "$10,000 per patient per year". Do they really need to take 18 of these pills every day?
fwiw: (10000/1.5)/365~=18"

I don't understand the point of this. In a mass market pill situation like lipitor production costs are trivial.

In smaller market drugs (like HIV) the cost of production goes up and the ability to spread the R&D costs around go down. The result is very expensive treatment costs.

Re: Re: Re: Re:

and if you give me a million dollars now, I'll even throw in a special magnetic bracelet that can have all kinds of unknown long term benefits. and it can even have long term benefits to your future children and grandchildren and great great great grandchildren if you wear it now!!!

The Real Culprit

Let's see, the FDA forces companies like Johnson and Johnson to spend billions and billions of dollars on the approval process. Sometimes, perfectly good medicines don't get approved and that money is wasted.

Because of government requirements, the price of medicine is much higher than it would be otherwise under pure market conditions.

So why shouldn't J&J or any other company hang on to their patents, charge what the market will bear and make their profits?

Bring prices down by getting government out of the way and returning to market conditions.

There is a lot of medicine sitting on shelves that can't be sold because there would be "too much risk" to people who are already dying.

As long as the risks are known, shouldn't that be up to the patients and their doctors to decide and not the government?

Re: Re: Re: Re: Quality vs Monopoly

When I was in business and negotiating with vendors I let them know that there were always three items of concern. Price, quality, and service. At any given time, one of those might be at the top of my list, but there was never any separation of the others.

In this instance, service means that supply is always there, and not hampered by their lack of delivery, for any reason. After all, we had to service our customers. We negotiated Prime Vendor contracts with one organization, they gave up terms and guaranteed not only a good price, but delivery on OUR schedule, and immediate replacement of any quality issues (set by standard). In return, we gave them about 90% of our business. If the truck failed to come, the sales reps drove 50 miles one way and loaded up their cars to make sure we got what we needed, and were glad to do it.

J&J is denying the product to some of the potential market. That is not service, even if it is just a pill.

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J&J get a win by actually getting paid for the their patented product as opposed to the country wishing to use it for generic purposes from declaring the patent invalid and just producing the generic version without licensing. This is the main point. J&J look like greedy scumbags for not helping HIV patients and get no licensing money by not participating. The countries that would like to use these patents can ignore the licensing if it means saving the lives of their citizens. So in effect by not participating they have the ability to make a lot more by controlling the monopoly but could potentially loses revenue if everyone ignores the licensing and just uses the IP anyway. J&J probably realize this and have done some sort of a cost benefit analysis that predicts they will make more money from traditional licensing arrangements than they lose from the reduced licensing through the patent pool. The real loss may come from a reduction of goodwill since it appears they are more interested in making money than saving lives.

Re: "no urgency"?

He is saying that developing countries DO lack the clinical environments to use these drugs properly and well as well as insufficient demand (dollars to J&J) due to WHO not listing them. WHO is reluctant to approve patented drugs at all much less ones where the owner of the patent is reluctant as J&J appears to be to license their patent to generic makers in those countries or regions.

I'm sure MSF would challenge this on every point. I'm more inclined to believe MSF on this one than the PR laden statement from Mr Stevens on this designed to fog rather than illuminate what J&J's true stance is. (Make all the money they can as quick as they can on this one.)

And yes, Big Pharma can be as crass and insensitive as the statement indicates J&J are being and just as dumb from a business standpoint. All too often, particularly around HIV they've been exactly that.

Hey, they're just a bunch of Africans. Who cares? That's the bottom line. Again.

Re: The Real Culprit

The reason for government "interference" in the first place is that drug companies too often released medications that weren't properly tested, whose side effects were known but hidden, and whose dangers weren't explained at all, if the drug company made them known, to clinicians and patients.

One huge one was Thalidomide which occurred with the FDA and other drug agencies on watch, supposedly. Another was the introduction of a mood altering, addictive drug, amphetamine, also known as speed. The source of the Rolling Stones' song Mother's Little Helper. As in "speed kills" in reference to the drug, which applies to it's current street form methamphetamine.

You have to trust that the drug companies will come clean on this stuff, do the tests they ought to do, make sure their products are safe and fully explained to clinicians who can then explain it to their patients. The history of the drug industry is that it doesn't. Because they don't do those tests because, according to them, it cost money.

Then came extended drug patents. Mostly after legislators the world over fell for Big Pharma's sob story about needing extended patents because they couldn't, actually wouldn't, compete with generic companies.

Kinda what's driving stuff like SOPA/PIPA now though I'll admit that on the patent drive Big Pharma did actually come up with actual evidence of the "harms" they were suffering.

Context

Just as a point is this not the same J&J that is currently on just the latest round of recalls of their products?
That they have cut corners so far and shipped shoddy, inferior products to consumers, that the Government is finally unwilling to look the other way any more?
Didn't they spend a crap ton of money to use "secret shoppers" to try and buy up all of their products in a back channel recall to avoid the lawsuits from selling contaminated drugs?
Didn't they claim the issue was a chemical treating pallets and there was nothing wrong with the drugs inside the containers, up until inspectors went and padlocked the plants producing these drugs as being unsuitable and dangerous?

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If only one person dies?
I was there when it started, when there was an epidemic no one wanted to talk about. When it didn't matter because "Good" (tm) people did not get it.
Well more than 1 person has died to get us to where we are today, and many more will die... and honestly people in the US will be more concerned if Snooki got a boob job than about the suffering and death of thousands in other countries.

Our society is more concerned with themselves and getting ahead than anything else, we learned these lessons from those in power who push others down to get more. Until you can give them a poster child who looks like them, nothing will change.

Re: Re: The Real Culprit

Oh you mean those "tested" drugs that the drug companies pay for the testing of and bury the bad results? And they spent billions on lobbying to make sure that there is no funding for the feds who are supposed to verify those claims and make sure they are actually safe? And those wonder drugs are proven to be ineffective or fatal? And more billions are spent making sure than there are limitations on the damages against corporations where you can actually prove they put a drug on the market that could kill people and kept it quiet?

Alternative?

One must conclude that by almost any neutral metric that J&J's prioritisation of profit over the lives of their customers is morally indefensible. No doubt the counter-argument would be that the company must recoup development costs.

In relation to the latter, I would posit firstly that the R&D figures quoted by pharma companies are exaggerated. Secondly, is HIV medication not a case for government funded & directed research? The argument against is usually that peer-reviewed scientific research is both more effective and more efficient, but surely the moral imperative that exists in this case overrides any spurious concerns regarding the degradation of government granted monopolies.

Oh, so monopolies in big business are considered poor business ethics, but not in pharmaceuticals?

Solution: Everyone should take Organic Chemistry and Biochemistry classes along with skills and techniques for labs related to these fields while in public education (not just in college). Then make it legal for people to make their own pharmaceuticals. That way we weed out the morons who drink methanol and get themselves killed because they think all alcohols are ethanol, and Big Pharma can't choose who gets what drug.

There's gotta be some sort of laws in place for this. Come on, Government - stop screwing around being on the fence about SOPA (a bill that should decidedly NOT pass and at least half your members disagree with) and start preventing this type of monopoly on profiting from diseases that we can't cure yet.

Patients Groups Protest the Patent Pool Licenses

It isn't just Johnson and Johnson that does not see the value of licensing to the Pool. Click here to read more about the 150 patients, NGOs and advocates who are publicly protesting the Pool's licenses: https://www.petitionbuzz.com/petitions/mppunitaid.